Patients with diabetes are two times more likely to experience depression than the general population, with depression being associated with poor diabetes outcomes and likely to be persistent. Prevalence of diabetes and its complications among Hispanics is twice that among non-Hispanic Whites, and they are less likely to receive care for depression. A randomized clinical trial will test the effectiveness of a health services quality improvement intervention, Multi-faceted Depression and Diabetes Program (MDDP), on improvement in depressive symptoms over time, patient adherence to diabetes self-care regimens, glycemic control, functional status, and quality of life among low-income Hispanic adults with diabetes. MDDP is aimed at positively affecting depression and diabetes outcomes by reducing socio-cultural patient/family, health care provider, and system barriers to patient access and adherence to guideline depression treatment. MDDP is designed for public sector primary care systems. Intervention enhancements include: depression care management based on a stepped care depression treatment algorithm; extension of the primary care management team with a master's degreed social worker, who acts as Diabetes Depression Clinical Specialist (DDCS) in collaboration with primary care physicians (PMDs) and a Case Manager; a psychiatric consultant to provide supervision of the DDCS and consultation to the PMD; DDCS treatment adherence and outcome monitoring and feedback to primary care providers; and PMD education on depression management. Cultural sensitivity and competency enhancements include: patient choice of first line treatment (medication/Problem Solving Treatment and degree of family participation in their depression care; PST tailored for Hispanic patients with diabetes; bilingual, bicultural DDCS; Spanish educational materials; and systems navigation services. Usual Care (UC) patients will receive the care and clinic services routinely provided to all patients with diabetes plus an educational pamphlet on depression. The study will be conducted in two large public urban community-based clinics serving low-income, predominantly Hispanic patients. Following a depression screen, 350 adult Hispanic patients with diabetes who meet diagnostic criteria for major depression or dysthymia will be randomized to MDDP or UC. Outcomes will be examined at 6, 12, and18 mo. Relationships between socio-cultural, clinical, clinic organizational factors and depression treatment adherence and outcomes will be examined, cost-effectiveness analysis will be conducted and patient and provider qualitative studies will address post-trial sustainability. Study Hypotheses: MDDP will result in: a) greater reduction of depressive symptoms; b) significant improvement in diabetic self-care regimens (i.e., diet, exercise, checking blood glucose, and taking diabetic medication), decreased HbA1c levels and diabetes symptoms; and c) will improve function and satisfaction with diabetic and depression care vs. UC.